I was thinking about how businesses could better use data, and I wanted to do a quick case study with some real data… even if it’s only a little bit of real data. This post will look at how a company like Ster-Kinekor could benefit from investing in a smarter CRM system but hopefully it will have insights that can be used by other businesses.

The Experiment:

Using the data that is publically available through Ster-Kinekor’s online booking system, I looked at ticket sales for a show across 10 cinemas at The Zone in Rosebank, all screened between 19:30 and 22:15 on Wednesday the 2nd of July 2014. For simplicity’s sake, I pegged the cost of each ticket at R62 and compared the number of tickets sold vs not sold based on the number of total seats in each cinema.*

The Results:

In total there were a total of 1,707 seats available to potential movie goers

During the evening, only 216 seats (12.6%) were sold

The other 1,491 (87.3%) of seats were vacant

Sold tickets generated an estimated R13,392 in revenue

The value of unsold tickets had an estimated value of R92,442

This excludes popcorn, Coke and Astros

Now this isn’t enough data to jump to any conclusions, but you would imagine that The Zone would be one of the busier Ster-Kinekor cinemas. And while this is taken during the week, I’d assume that the real opportunity would be to look for ways to increase attendance during the least busy times, especially during the day….

At first I thought the solution might be for Ster-Kinekor to implement a loyalty programme:

See 10 movies, get the 10th one free. But while surfing on their website, I was shocked to find that they already have this in the form of the SK Club. The only thing is that 11th free movie at The Zone has already cost you between R310 – R620 depending on whether you watch your movies on a Tuesday or not.

But what if Ster-Kinekor had a better, smarter CRM programme and invested more in data-based marketing?

To me, there is a big difference between a loyalty programme and a CRM programme. While a loyalty programme can reward a customer, a CRM programme can go one step further by creating a unique and personalised experience for that customer. The way that this can be achieved is through data.

Every business generates data. The only thing usually missing is having the people with the right skill set to make sense of the data and identify the opportunities. When you get this right, data can be a huge competitive advantage.

The beauty about this Ster-Kinekor case study is that you can extrapolate any effort put into a CRM programme into a tangible business value. In many ways, the cinema chain’s business model is very similar to the hotel industry, another industry that has embraced the concept of CRM. Hotels sell rooms, Ster-Kinekor sells seats (and popcorn and Coke). The more people sitting in seats (and eating popcorn and drinking Coke), the bigger their bottom line.

The success of a great CRM programme (and the data people behind it) would depend on being able to find out how much money Ster-Kinekor could lose on tickets to increase the overall current profits from popcorn and Coke sales or vice versa….Theoretically speaking, Ster-Kinekor could probably afford to lose some money on both tickets and snacks, but only if they could increase the overall number of bums in seats.

Now between their loyalty cards and mobile apps, Ster-Kinekor probably has a comprehensive database with enough information about their customers to build the foundation of a smarter CRM programme. Here are some ways that they could make this happen:

Dynamic Prices

Not all customers are created equal. The buy 10 get 1 free mechanic is great, but if you are a true movie fan, wouldn’t it be awesome if you could unlock a tiered discount based on your patronage? As it stands, if you have a Discovery movie card, you actually pay more to watch a movie the second time than the first. In reality, it should be the other way round to increase repeat viewings and fill up cinemas…

In fact, if you think about it, even movie shows at different times of the day should be priced differently based on fluctuating demand….The only way to do this is to get a clearer understanding of each individual customer based on their long-term movie watching habits.

Social Reviews

Social reviews aren’t just another way to increase visibility on social. Companies like Amazon and Netflix have used customer reviews and ratings to get a better understanding of customers, increase the amount of content viewed and increase sales.

By getting a better understanding of your individual customer’s favourite movie genres and actors, it would be possible to segment a database and geo-target them with time-based discount offers to increase attendance across various cinemas during week nights.

More Special Events

Ster-Kinekor already does premieres for the latest blockbuster movies, but I think this could be taken further by identifying and creating once off events targeted at specific movie fans. Imagine if Ster-Kinekor celebrated the birthdays of filmmakers like Alfred Hitchcock with a weekend movie festival, or screened the original Planet of the Apes before the release of Dawn of the Apes. Halloween Horror festivals, Star Wars Marathons, 100 Movies to See Before You Die…all of these events could be promoted, amplified and tracked through digital means.

There are plenty ways that businesses can use data to create value. It requires investment, in both people and systems but if done correctly it can create a better experience for customers and more more money for a business. Now after that lengthy post, I think I really feel like going off to sit in a dark room and drink some Slush Puppy.

*The very small bit of data used for this post can be found here. If there are errors or oversights, please let me know and I will do my best to update it.

In the days of netflix and torrents, R62 is a lot to ask customers to shell out for a movie, not to mention the mark-ups on snacks. I know in my experience, people avoid going to movies unless they’re extravaganzas that the big screen will help you appreciate. Godzilla? Movie theatre. The average Will Ferrell comedy? On laptop in bed. The solution may be to lower prices across the board and go for volume.
I think special events are the greatest of great ideas. Movie theatres have a problem in that as social tools they’re both more and less effective than having people over to your house. Going to a movie is a handy arrow in the social quiver and you can don’t have to worry about whether you have enough couches for all your geek friends who want to see the latest Hobbit movie, but you can’t interact with each other the way you’d have more leeway to do at home.
But when I was a kid, there was a small independent movie house in my neighbourhood that rented theatres out for birthday parties, etc. As well as private parties, potential customers could include hobby societies (A science club might attract new members with David Attenborough’s Planet Earth on the big screen, or the scifi society could arrange a Star Wars marathon). Provide a modest buffet afterwards, and it’s a party.